Thread: Oil: rising -- over the $50 mark again.

OUr gas has jumped 40 cents in a week and half. And for what freaking reason. If you watch the stock market you can tell which way it will go!!
If the stocks go up alot gas goes up alot. If they go up a little gas goes up a little. But if stocks plummet it still trickles down in price. Ya ever notice it Never goes down more than about 5 cents at a time?? I say conspiracy....lol

ours, today is all over the freakin place!

I *gasp* got Chavez gas today for $2.19 cash or credit...

where the rest are between $2.49 and $2.79 for credit (or $2.39 - $2.69 for cash).

I think it went up for Mother's Day weekend...but who knows.

Ours has jumped from $1.99 to $2.29 (as of yesterday). Uggggh!

Oil hovers above $86 after 2-month, 24 pct rally
Pablo Gorondi, Associated Press Writer – 54 mins ago

Oil prices hovered near 18-month highs above $86 a barrel Tuesday as traders considered whether a recovering U.S. economy warranted further gains.

By early afternoon in Europe, benchmark crude for May delivery was up 4 cents to $86.66 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose $1.75 to settle at $86.62 on Monday, the highest since October 2008.

Oil has jumped 24 percent since early February.

Crude had traded between $69 and $84 for about nine months before breaking out last week amid investor optimism that an improving U.S. economy will eventually boost crude demand. On Monday, reports showed strong improvements in demand at services businesses and in the housing market.

"We have a general sense that the economy is improving, and investors are now able to see a possible outlook for greater driving demand," Cameron Hanover said in a report. "There may be a lull as we await this week's supply and demand statistics."

Analysts also pointed out the speculative positions expecting oil prices to rise likely increased to an all-time high this week. "We think that the oil price increase is only of temporary nature, since it is driven by liquidity rather than by fundamental factors," said a report on commodities from Commerzbank in Frankfurt. "The recent increase in correlation between oil prices and equity markets, which has now reached unprecedentedly high levels underscores our view."

Experts also were concerned that higher oil prices would hinder the global economic recovery. "The economy recovery of 2009 was fueled with crude oil at $62 a barrel, not at $90 or $100 a barrel and we fear that the latest run on (the Nymex contract) will be the kiss of death for a global economy that was trying to avoid the possibility of a double-dip recession," said Olivier Jakob of Petromatrix in Switzerland.

In other Nymex trading in May contracts, heating oil rose 0.34 cent to $2.2709 a gallon, and gasoline dropped 0.26 cent to $2.3476 a gallon. Natural gas fell 1.2 cents to $4.265 per 1,000 cubic feet.

In London, Brent crude was up 9 cents at $85.97 on the ICE futures exchange.

http://news.yahoo.com/s/ap/20100406/...xob3ZlcnNhYm8-


What's Driving Up Oil Prices Again? Wall Street, Of Course
by: Kevin G. Hall McClatchy Newspapers April 5, 2010

Washington - Oil consumption has fallen, demand from U.S. motorists for gasoline is flat at best and refiners that turn crude into fuel are operating well below capacity. Yet oil prices keep marching toward $90 a barrel, pushing gasoline toward $3 a gallon in many markets, and prompting American drivers to ask, "What gives?"

Blame it on the same folks who brought you $140 oil and $4 gasoline in 2008: Wall Street speculators. Experts attribute much of the recent rise in prices to flows of speculative money into oil markets. These bets are fueled by investor expectations that the U.S. and global economies are poised to return to growth and thus spark increased use of oil. Strong growth in China supports the narrative of rising oil consumption and tightening supplies.

"The thinking goes that rising stock (market) prices implies expanding business activity, implies growing energy demand, implies rising oil prices. I think you can make that case, but it's awfully weak," said Michael Fitzpatrick, vice president-energy for MF Global, a financial firm that brokers the sale of contracts for future delivery of oil.

While there are signs of U.S. economic recovery, such as a slight uptick in consumption and strong manufacturing data, there are plenty of ho-hum signs too, including dismal construction spending and continued high unemployment. "I just don't think if you look across the entire spectrum of the macro-economy that it creates a picture of a growing body of incontrovertible evidence that there is a strong, sustainable recovery. I just don't see it," Fitzpatrick said. "I think it should be closer to the range we were seeing in late summer and early fall, $67 to $72" a barrel.

On the last day of July, oil traded at $67.50 a barrel and gasoline sold at a nationwide average of $2.52 a gallon for regular unleaded. On Thursday, oil prices settled at $84.87 on the New York Mercantile Exchange, and regular unleaded gasoline averaged $2.80 a gallon and more than $3 on the West Coast, according to the AAA. "It's the story we've been talking about.... It's really about oil being an attractive investment for investors right now," said Troy Green, a AAA spokesman. "You've seen quite a bit of money flooding into the oil markets because of that."

What's different about today's price run-up from two or three years ago is that oil is now in ample supply.

"If you look at the fundamentals right now, there is certainly an abundance that is available (of oil) to the market for the next 12 months or so. It's not a near-term supply shortfall," said David Dismukes, the associate director of the Center for Energy Studies at Louisiana State University in Baton Rouge.

U.S. motorists and businesses consumed 18.69 million barrels per day (bpd) of petroleum product last year. That's projected to rise slightly this year to 18.89 million bpd. However, it remains far below peak consumption of 20.80 million bpd in 2005.

The latest data from the Energy Information Administration, the statistical arm of the Energy Department, shows that as of mid-March, U.S. refiners were operating at 81.1 percent capacity. They're making eight gallons of gasoline for every 10 they're capable of producing, a clear sign that demand is down.

Perhaps the only argument that would justify rising prices is that global consumption is expected to grow by 1.6 million bpd to 86.6 million bpd this year, according to the Paris-based International Energy Agency. Even so, there's 6 million bpd of oil that's shut-in, a technical way of saying that recoverable oil is being left in the ground by the world's oil producers. "When you look at inventories and shut-in capacity, (oil) prices today are above what those would indicate," said Daniel Yergin, the author of "The Prize: The Epic Quest for Oil, Money & Power," the recently updated Pulitzer Prize-winning book that chronicles the history of oil.

When oil traded above $140 a barrel nearly two years ago and pundits warned that the world was running out of oil, Yergin suggested that a glut of oil would come onto the market in 2010 and beyond. The 6 million bpd of oil now on the sidelines suggests that he was right. Today's spare production capacity is three times what it was in 2004 and 2005, when supply actually was tight.

The Organization of Petroleum Exporting Countries signaled this week its concerns about rising prices by not calling for hard enforcement of production quotas by its members. That suggested the cartel will tolerate an open-spigot policy by its 12 members as needed to stabilize prices. "While OPEC was silent on any threat to the recovery, speculation continues that the cartel is deliberately allowing members to exceed production quotas in order to limit upward price pressure," wrote analyst Matt Robinson, in a research report Thursday by forecaster Moody's Economy.com.

Rising oil and gasoline prices are deja vu all over again for Michael Masters. The hedge fund manager has crusaded for legislation that would prevent so much speculative money in the oil markets. Wall Street is "gaming" the price of oil, he warns. "If you're a bank, and you know there is going to be a large amount of investor inflows into the commodities market, you are going to position yourself ahead of them... You want to be a seller at a higher price," explained Masters, noting that large Wall Street banks invest for themselves in these markets even as they also broker the oil investments of others.

What's abundantly clear, he and others argue, is that an oil contract's price today has little to do with the supply of and demand for oil. "It's a capital asset now. Once the majority of participants are capital-asset folks, common sense would tell you it's going to be traded like a capital asset... and consumers pay," Masters said. "It wasn't that way in the past."

What can be done?

The Commodity Futures Trading Commission is weighing a proposal to put global limits on how many oil contracts any one market player can buy or sell, and legislation to revamp financial regulation that's expected to pass Congress this year could force greater disclosure by oil traders to regulators.

Neither, however, promises imminent relief at the pump.